The PEFA Framework

Overview

Under the Public Expenditure and Accountability (PEFA) Program, the public financial management (PFM) Performance Measurement Framework (PMF) (or PEFA Framework) has been developed as a contribution to the collective efforts of many stakeholders to assess whether a country has the tools to deliver three main budgetary outcomes:

aggregate fiscal discipline

strategic resource allocation

efficient use of resources for service delivery

The objectives of the Framework are to:

provide reliable information on the performance of Public Financial Management (PFM) systems, processes and institutions over time;

contribute to the government reform process by determining the extent to which reforms are yielding improved performance and by increasing the ability to identify and learn from reform success;

facilitate harmonization of the dialogue on PFM performance, reform needs and donor support between government and donors around a common PFM performance assessment and therefore contribute to reduce transaction costs for country governments.

By providing a common pool of information for measurement and monitoring of PFM performance progress, and a common platform for dialogue about PFM reform, it aims to contribute to the development of effective country-owned PFM systems.

The PEFA Framework was created as a high level analytical instrument which consists of a set of 31 indicators and a supporting PFM Performance Report, providing an overview of the performance of a country’s PFM system. Drawing on the established international standards and codes, and other commonly recognized good practices in PFM, it forms part of the strengthened Approach to supporting PFM reform, which emphasizes country-led reform, donor harmonization and alignment around the country strategy, and a focus on monitoring results. This approach seeks to mainstream the PFM best practices that are already being applied in some countries.